A detailed theoretical analysis of the 1s photoionization of neon is presented. It is found that the most significant many-electron correlation in computing photoionization of inner shells is the rearrangement of the outer shells caused by the inner vacancy. Further noticeable effects are: (i) the polarization of the ion core by the outgoing photoelectron and (ii) the coherent effect of double excitation/ionization. The core polarization increases the photoionization cross section by about 10% at the 1s threshold, and the coherent excitation results in further increases by about 5%. Incoherent excitation of the satellite channel leads to an additional 10% increase in the photoabsorption cross section in the double-ionization threshold region.